What's the Difference Between Foreclosures and Short Sales?

Reblogger Joyce Gebhart
Real Estate Agent with McCollough & Associates, Inc./Advance Realty

The difference between Foreclosures and Short Sales are described very well in this blog.  I honestly believe that our consumers need to know this information.  Often I am pressed with the buyer that really wants a foreclosure because they think there is going to be more value in the home, when they could, if not in a big hurry, buy a short sale instead.  Great information here!!

Original content by Debe Maxwell 228209

What's the Difference Between Foreclosures and Short Sales?

Real Estate Q and AYou've got to love reading through some of the questions and answers on Trulia!  I always love to clear up the consumer's questions that seem to be so simple for us but, not so elementary for those who are not in the real estate business.  Here's the short version of a recent question that I thought needed a bit of clearing up: 

What is the difference in a foreclosure and a short sale and which is the best one to buy?


In response to the initial question - The difference between a foreclosure and a short sale is that a foreclosure is owned by the bank and a short sale is still owned by the homeowner of record. That homeowner is dependent upon the bank(s) approval of the sale of their property for less than what they owe on their mortgage(s). The short sale process can take awhile but, there are different schools of thought as to which is the best to purchase--short sales or foreclosures.

Consider this--Many homeowners who have lost their home to foreclosure, leave their homes angry and tend to stop maintaining or caring for their home, sometimes removing appliances and light fixtures as they are asked to leave their home, and sometimes even maliciously destroying their former homes as they leave the home. Many short sellers WANT to protect themselves from the 7-10 years of bad credit that a foreclosure can bring, therefore they do everything that they can to keep their homes maintained so that they CAN get a buyer and get out from under their mortgage with as little damage to their credit as possible.

Short sales can and often DO take longer than a standard home purchase or even a foreclosure but, the home that you buy, compared to other options (standard resale or foreclosure), can be in better condition and at a great price too.

Buying a foreclosure is easier on you and your agent but, if you have patience, a short sale can be the better investment, oftentimes requiring FAR less rehabilitation for you, as the buyer.

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Rainmaker
1,386,240
Andrew Mooers
MOOERS REALTY - Houlton, ME
Northern Maine Real Estate-Aroostook County Broker

Great explanation to help the public watching the real estate markets across North America. Maine is 46th lowest for FSSR (foreclosure, short sale, repossession)

Jan 10, 2011 11:41 AM #1
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Debe Maxwell
www.AtHomesCharlotte.com | Savvy + Company Real Estate - Charlotte, NC
Charlotte Homes for Sale - Charlotte Neighborhoods

Thanks for the re-blog, Joyce!  This information is imperative for the consumer as there are many agents who prefer just to sell their buyers a foreclosure to just get it done!  I totally disagree with that philosophy and have seen many successful short sale closings where the buyer had absolutely nothing to do to the home when it closed--certainly not the case with foreclosures (at least here)!

Jan 10, 2011 11:45 AM #2
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